Getting financial advice is one of the most important decisions you will make for your financial health. A financial adviser may not be a prerequisite for managing your wealth, but if you choose to go down that route, you must find the right professional for you.
A financial adviser should be invaluable in helping you build a financial plan that matches your current financial position to your long-term wealth goals and risk outlook.
As you are entrusting them with your money, it is worth doing the work to discover as much as you can about them and their services. It is, therefore, a good idea to meet with a few advisers before you ake a decision.
That said, it does not negate the fact that you are still the most critical person in the room when determining your financial health. We have put together 10 key questions to ask a financial adviser at a first meeting:
1/ What are your qualifications, and do you have industry certifications? All financial advisers in the UK must be qualified for QCF Level 4 in financial advice as recognized by the Financial Conduct Authority (FCA). A code of ethics must also bind them, and they must have regular training by having a Statement of Professional Standing reviewed annually.
2/ Are you an independent financial adviser? They will either be independent or tied to a big firm. Independent means that they can offer products from multiple providers. However, if they work with a single firm, the adviser can only recommend products from a single provider if tied to one financial firm.
3/ How much do you charge for advice, and how is it calculated? A good financial adviser should be able to tell you how their fees are determined and how that will affect you in the long and short term. They should also be able to explain all the costs that you are likely to face and how that will affect your investment returns.
4/ What is your investment approach? Can it be tailored to you, or do they offer all their clients a similar package, irrespective of the circumstances? What considerations do you make for my comfort around risk-taking and the investment returns I want to achieve?
5/ Can I see a copy of a financial plan? Does the plan layout and style make sense to you? Is it in simple language and understandable in layperson’s terms?
6/ What experience do you have, and can you give me your performance record? It is a good idea to find out about the type of clients, the size of wealth they are used to managing, and the wealth bracket they are used to serving. For example, can they deploy £50,000 just as easily as £500,000 in various assets? Do they have clients with characteristics similar to yours?
7/ How is my money protected? Does the Financial Services Compensation Scheme cover you if you are mis-sold a product?
8/ How do you keep in contact and give updates? How often do they update you? What method do they use, email or phone call, or do they have a client portal you can log in to anytime you wish? How do they respond to questions you have in between meetings? When are you notified of significant decisions made about your money, e.g., changes in approach or investment reallocations?
9/ Who can I contact if you are unavailable? Is there a backup plan in place? Do they work in a team? If they are just one individual, who do you contact if the worst happens to your financial adviser?
10/ How will we measure the success of my plan? What will we use to determine that my plan is on the right track to meet my goals and that no adjustment is needed? How often will we review this plan?
Happy hunting!
This article is not financial or personal advice. We are not financial advisers. The information contained in this article is designed for educational and informational purposes only. It is provided solely to enable you to make your own choices. Always remember that if you choose to invest, the value of your investments can fall or rise, so you could get back less than you invested. So, it is essential to seek advice from a qualified, authorised and registered professional. Note also that past performance is not a reliable indicator of the future performance of any investment.
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